Do you want some scrambled eggs and toast with your popcorn?

Multiplex giant AMC won't be sizzling up breakfast orders anytime soon, but it did launch its bold A.M. Cinema program over the weekend. The chain is now opening earlier on weekend mornings and charging thrifty early birds substantially less to get in on a picture show.

My nearest AMC was charging just $5 a ticket for all showings before noon on Friday, Saturday, and Sunday. Admission tops off at $9 for adults later in the day.

AMC, like most chains, marks down early matinees. It's just never been this aggressive at doing it before. The industry has seen its box-office ticket sales shrink for three consecutive years, and trying to extend the day makes perfect sense.

An uphill battle
Movie theaters need to do what they can to win back jaded audiences, short of retrofitting all of their theaters to look like home-theater living rooms and charging a buck for some homemade Jiffy Pop. Theater operators find themselves battling against a shorter lifespan before a hit title makes it to the DVD market, and the ever-cheapening prices of LCD and plasma televisions have only improved the value proposition of screening a film at home.

The quality of the product isn't necessarily the problem. Netflix (NASDAQ:NFLX) wouldn't have grown as quickly as it has over the years, complete with shrinking churn rates, if mainstream audiences weren't hungry for celluloid.

The studios can deal with the audience shift from theater to DVD. They'll get their money for delivering the content either way. It's the theater chains that are spooked, because their reach begins and ends with the theatrical run. The studios take a generous cut of the box-office take, so theaters have been relying on things like marked-up concessions. Extending the movie day, as AMC is aiming to do, should also help, especially for the freshest releases that would play to sold-out audiences later in the day. And since AMC is unlikely to mark down the gargantuan tubs of popcorn or the wading pool-sized cups of soft drinks, this is a good idea.

Let's just hope that it's not the last idea.

Saving the cinema
Last summer, I explored the plight of the industry in a column titled " The Last Picture Show." My sector-saving suggestions were plenty, though not necessarily fleshed out.

"If you want to live, multiplex, diversify," I wrote at the time. "Take chances. Mix up the menu. Have daily specials. Allow folks to order concessions at the time of ticket purchase and have them delivered to their seats. Create online experiences to galvanize the moviegoing community. Utilize less productive multiplex screens for community events that bring folks back to the theater for a variety of fresh purposes." So I am now applauding the A.M. Cinema initiative, even if it fails miserably, because it sure beats stagnancy.

I may never understand, however, why concession menus err on the side of boring. I mean, sure, I understand the magic of high-margin wieners, salty snacks, and candy. But what I don't get is how nearsighted an industry can be by not realizing that the whole "dinner and a movie" mindset can be altered in its favor with a more meal-worthy, experience-driven approach to feeding the captive film buffs. Anything is possible with a digital download and a full kitchen at home. How can the industry not realize what it is up against?

I have seen publicly traded theater chains come and go. There was a time when one could have bought shares in AMC, but these days, stock jockeys are limited mostly to Regal (NYSE:RGC) and Carmike (NASDAQ:CKEC) for pure multiplex plays. A cynic would argue that one would want to avoid pure plays in a battered sector like this, but I'm not leaning that way. The leading chains have to get it right sooner or later.

Not flunking another screen test
The record-breaking debut of Pirates of the Caribbean: Dead Man's Chest has operators feeling pretty good about 2006. Maybe this is the year that the annual declines cease.

There are some other promising initiatives, too. For one, more theaters have been turning to IMAX (NASDAQ:IMAX) to retrofit some of their screens to feature the bigger-than-life sensory experience -- one that deserves a healthy premium and is worthy of "a night at the movies."

There is also the move to digital projectors. AccessIT (NASDAQ:AIXD) has teamed up with Christie/AIX to install 534 systems in 70 theater houses, and Thomson's Technicolor Digital Cinema subsidiary is starting to catch on as well.

Replacing old systems with digital ones isn't cheap, but theater operators can help offset the investment by saving hundreds every time an individual print is delivered and open up the possibilities to digitally delivered edits, enhancements, and live broadcasts.

The industry isn't going to take its obsolescence lying down. The innovative will survive as they always have, and maybe there will be a Rule Breaker investment or two in there before the turnaround is apparent to rest of the market.

IMAX is already an actual Motley Fool Rule Breakers recommendation, and AccessIT is a name that often comes up in the subscriber discussion boards. I also have a soft spot for Hollywood Media (NASDAQ:HOLL), a company that runs the popular and sites and has a small stake in online ticketing giant In any event, if something exciting is going to happen in this space, it's going to happen soon, because it's a sector that can't afford to wait too long before the feature presentation.

Go ahead, movie chains. I am sitting down, mindful of my costly concessions, and paying attention. Entertain me.

Longtime Fool contributor Rick Munarriz loves to spot great things early. That's why he's been with The Motley Fool since 1995. He does own shares in Netflix, a Stock Advisor selection. TheFool has a disclosure policy. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.